Why you should refer (some) potential clients to competitors.

I often get phone calls from customers who are not a good fit for my service. This could be for any number of reasons, but it’s most commonly because they are:

Looking for a service I don’t offer

Unable to, or would be struggling to afford it

Located outside of my service area

An obvious pain in the ass

You may be tempted – as a starting tutor or small agency – to try to accommodate any and all potential leads, but I would strongly recommend against it. Difficult clients create a lot more problems then they are worth.

What do you do with them, then? Refer them to your competitors! This counterintuitive approach has many short and long-term benefits with almost no downside to you.

Customer good-will.

The biggest benefit of referring prospects to competitors is creating goodwill.

When you call a business or visit a store and all they say is “Sorry, can’t help”, doesn’t it often sound a lot like “f*ck off”? Wouldn’t they give off a much better impression if they had instead told you “Sorry, we can’t help you – but let me suggest a few places that can.”

The people who call you feel the exact same way. Regardless of the reason that you can’t help them, they can either feel good about calling your business… or not so good.

Which would you prefer?

Prospects you can’t help

If someone calls looking for a service you don’t offer, there’s nothing lost by referring them to a competitor that does. Your competitor might get the sale, but you’ve gotten the goodwill of this prospect.

If there’s a service you provide (but your competitor doesn’t), odds are this person will remember you, and they might come back to you later. It’s happened to me before.

Your competitors will also thank you, and might refer clients to you in the future – but more on that later.

What about folks that can’t who can’t or would struggle to afford your rates?

If you’re like me, you probably got into tutoring to help people, and you feel bad when you can’t work with someone because of their financial situation. You probably also know tutors (or companies) in the area who charge less than you do so instead of (politely) telling these prospects to pound dirt – or letting them rack up bills they eventually can’t pay – refer them to said tutors.

The prospect will get the help they need and will feel good about calling you. You’ll feel good about helping a fellow human being, even if not directly. You won’t get stuck with unpaid invoices. Your competitors will be thankful you sent them a client, even though that client won’t make them that much money.

The same holds true for prospects outside of your service area. Send them to a competitor who can work with the prospect either because they are closer, or are willing to put in the time travel to them.

My aim when people call is to be as helpful to them as possible, even if that means referring them to someone more appropriate. People will appreciate it – I’ve even had potential customers leave positive reviews based solely on that phone call, despite never having worked with them.

Prospects you don’t want to work with

Should you ever turn down prospects who want a service you offer, can afford your rates, and are within your service area? I think so.

Difficult customers can make your life extremely unpleasant, and one ‘difficult’ customer can create far more stress and drama than the rest of your roster combined. Difficult in this context means prospects who are demanding, argumentative, overly anxious, pushy, volatile, full of unrealistic expectations, or are for some other reason unpleasant to deal with on a person-to-person level.

As you become more established as a tutor you’ll find yourself naturally less inclined to tolerate the stress that comes with servicing such clients. You’ll also start developing a “sixth-sense” allowing you to spot them earlier in the process.

The gentle way

At this point, I simply refuse to work with clients who are obviously a pain in the ass, and I think you should too, but how do you go about turning them down?

“You sound like a pain, and I don’t want to work with you” is honest, but not constructive. “Sorry, can’t help” is also honest, but still leaves room for bad feelings and further questions. “Why can’t you help? Do you have a problem with me?!” “Well, I do now…”

Ending conversations positively is even more important when dealing with volatile people, so turn them down by helping them out – send them to your competitors! The competitor might not find this client difficult, or might be willing to deal with the client for the revenue. Either way, both the prospect and your competitor will thank you.

If you’re not sure how to do this in a tactful matter, try something like this:

“I’d love to help you, but I’m not really as familiar with this subject as I would like, so I don’t think I’m the best choice. I think XYZ tutors would be better suited for this. Here’s their number.”

If you happen to be an obvious expert on the subject, however, you might need to cite a lack of availability or come up with something else.

Don’t get stuck working with someone because you don’t know how to say ‘NO’ even if when you know it’s the right thing to do. It’s bad for you, it’s bad for your business, and in the end, it’s bad for that customer.

I breathe a deep sigh of relief each time I refer an obviously difficult client to someone else.

A bit of Evil…

You might be concerned that despite the good-will created, sending customers to your competitors hurts you by helping their business. This is a valid but (in my opinion) short-sighted concern.

First off, there is plenty of tutoring work to go around. Your competitors are not your enemies – they are business owners just like yourself, trying to make a living in often difficult circumstances. Sending a few clients their way won’t propel their business into the stratosphere, but it will potentially make their lives a little better.

Some of my local competitors have called me to thank me for sending them business, built relationships with me, and have created mutually beneficiary business arrangements with me as a result of me sending them business.

Second, consider the customers you are sending them.

If you are truly motivated to hinder your competitors business, sending them difficult customers is probably the most effective way to do so. Difficult customers take up a disproportionate time to manage, and low-paying customers do little for your competitor’s bottom line.

Let them deal with those customers while you are busy expanding your business, finding better clients, and raising your rates.